Good morning, and welcome to our rolling coverage of business, the world economy and financial markets.
It is inflation day in the UK, and the latest figures are expected to show the cost of living rising to another 40-year high. Economists are predicting that the annual inflation rate rose to 9.1% in May, from 9% in April, and will hit double-digit highs in the coming months.
The 9.1% rate would be the highest since March 1982, nearly five times the Bank of England’s target of 2%. Annual inflation was in the double digits in February 1982, when it was 10.2%. The Office for National Statistics is due to release the latest Consumer Price Index data at 7 a.m. BST.
The Bank of England’s own projections expect inflation to reach 11% by October.
My colleagues Niels d’Hoog, Ashley Kirk and Hilary Osborne have looked at how the cost of living crisis is affecting UK homes (please note Niels’ Twitter handle is @nielsdhg,
How is the cost of living crisis coming to UK homes? @niels, @hilaryosborne And I dug into the data to explain the current pressure on the household budget and how it fits into the longer trend of income stagnation. pic.twitter.com/PV1oguqdUv
— Ashley Kirk (@Ashley_J_Kirk) 21 June 2022
Philip Shaw, chief economist at Investec, said:
We anticipate the headline CPI rate to remain at 9.0%, but expect strong food costs, higher petrol prices and another sharp hike in energy price cap (in October) to push inflation into double figures in the coming months Is.
At the same time, wage growth has not kept up with inflation. According to data published yesterday by XpertHR, annual wage growth has stalled at 4% in the three months to May. The report follows a Bank of England business survey that showed employers surveyed in May were not planning to raise pay rates further.
This means that the ghost of a 1970s-style “wage-price spiral,” which could have forced the Bank of England to dramatically raise interest rates, has not materialized, at least for now.
National Rail services to start later today and with lesser timings, due to the knock-on effects of yesterday’s walkout when 80% of services were terminated. It was the first day of the biggest rail strike in decades. However, there is more sad news for the commuters: the second day of the rail strike is tomorrow and the third is on Saturday.
Our transportation correspondent Gwyn Topham has a handy explanation on the attacks:
RELATED: UK rail strikes – the truth behind the claims and counter-claims
Asia-Pacific markets slipped again despite major Wall Street indices rising more than 2%. Japan’s Nikkei fell 0.05% and Hong Kong’s Hang Seng fell 1.15% while the South Korean Kospi fell 1.9%. European shares are also expected to open lower.
work schedule
- 1.30 a.m. BST: Canada Inflation for May (estimate: 7.4%)
- 2.30 pm BST: US Federal Reserve Chairman Jay Powell testifies to lawmakers
- 3pm BST: Eurozone consumer confidence flash for June (Forecast: -20.5)
Source: www.bing.com
